Eisenstein Speaks on Wayfair v. South Dakota at Massachusetts Taxpayers Foundation

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Eisenstein Speaks on Wayfair v. South Dakota at Massachusetts Taxpayers Foundation


On September 25, 2018, Martin Eisenstein presented at the annual meeting of the Massachusetts Taxpayers Foundation.  He discussed the United States Supreme Court’s decision in Wayfair v. South Dakota, which changed the test for sales tax nexus, replacing the earlier physical presence test with an economic substance test.  As Eisenstein noted, the Court underscored that a state tax must not place an undue burden on interstate commerce, while holding that physical presence was no longer the test for determining what constitutes an undue burden.   Rather, courts should review a number of factors, including the size of the company, whether the state attempted to apply its economic presence standard retroactively and whether the state had adopted the Streamlined Sales and Use Tax Agreement, which provides for administration of the tax at the state level, and other measures to simplify the tax to permit collection.  Eisenstein also addressed the implications of the Wayfair decision for other types of state tax, including income and gross receipts taxes.

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